Configuration of the SAP lot Sizing Parameter
YES Customer-specific
New/phase-in material
(no demand history)
Static
'Replenishment to maximum level'
• high order costs, negligible holding cost,
limited stockroom
• AND/OR technical requirement, e.g. silo, tank
NO
Splitting of big lots Splitting of big lots
(big lot, small capacity) (big lot, small capacity)
Lot size with splitting Lot size with splitting
and overlapping and overlapping
FK: Fix lot size for EX/ES/ZX:
customer specific order exact lot size
} FX/FS: Fix lot size
• Can be entered as fix lot size restriction
Hourly lot size
– A/X item
– OR: very limited stor-
age and L or N-item
– OR: very high rate of
obsolescence
(<1day)
+ low order/setup cost
+ very short lead time
(<1day)
YES
Splitting of big lots Splitting of big lots
(big lot, small capacity) (big lot, small capacity)
Lot size with splitting Lot size with splitting
and overlapping and overlapping
HB: Replenishment Hourly lot size
until max level
(if pre-specified delivery period (e.g. by supplier) , corresponding period length to be chosen; otherwise given criteria apply)
Shift lot size
– A/X, B/X item
– OR: very limited stor-
age and L or N-item
– OR: very high rate of
obsolescence
(<2days)
+ low order/setup cost
+ very short lead time
(<2d)
Splitting of big lots
(big lot, small capacity)
Lot size with splitting
and overlapping
Shift lot size
Daily lot size
NO
} Enter lot size restrictions
• Min lot size (e.g. quoted by production or supplier)
• Max lot size (e.g. quoted by production, supplier or inventory)
• Fix lot size (technical restricitons: tanks, palettes, boxes)
Application of additional lot size method:
• L-parts and limited stockroom
NO • AND: Z-parts and not demand-driven
• AND: no saisonal material (Z-categorization valide valid over all periods)
• AND: NO 'replenishment to maximum level' (holding costs are not negligible compared to order costs)
YES
Position in product life cycle
Established material Old/phase-out material
• Last order
Saisonal material YES
NO
Optimizing method
• A or B item
• Demand-driven OR MTO
• Consumption-based OR demand planning with forecast for BOM top-level and X,Y item
• Inventory holding cost and order cost known
• No planning in fixed order-/delivery-intervals OR this is not focus of the lot-size planning
• If limited stockroom: no Y/L parts
Else: Periodic method
• Demand-driven OR MTO
• Consumption-based or demand planning with forecast for BOM top-level and X, Y item
• AND/OR A-item (including A/Z-items)
• AND/OR: Planning in fixed order-/delivery-intervals (including Z-items)
Else: Static method
• 'Replenishment to maximum level' (high order costs, negligible holding cost, limited stockroom and/or
technical requirement, e.g. silo, tank)
• Remaining materials: 'EX'(exact lot size); in particular for B/Z and C/Z items, when consumption-based
or BOM top-level and forecast is conducted
Periodic Optimizing
Choice of period length for which the requirements are combined to one lot size Procurement material
(+discount and supply
structure important)
NO YES
Daily lot size Weekly lot size 2-weekly lot size Monthly lot size Quarterly lot size Flexible period
– A/X,A/Y,B/X item – A/Z,B/X,C/X item – B/Y,C/Y item – B/Z,C/Z item (analog to PPS (analog to posting
– OR: limited storage – OR: limited storage – OR: limited storage – OR: low rate of planning calendar) period) B-item
and L-item and L-item and L-item obsolescence – C/Z item – Coordination with
– OR: high rate of – OR: high rate of – OR: moderate rate (>8wks) – Coordination with accounting system YES NO
obsolescence obsolescence of obsolescence + low order/setup cost production planning/ – When material cost
(7days) (<4wks) (<8wks) + long lead time item only needed for need to be deter- X-item
+ low order/setup cost + low order/setup cost + moderate order/ (>8wks) one production run mined within the
+ short lead time(<7d) + short lead time setup cost posting period (e.g.
(<4wks) + moderate LT (<8wks) for projects)
NO YES
Splitting of big lots Splitting of big lots Splitting of big lots Splitting of big lots Splitting of big lots Splitting of big lots Splitting of big lots Splitting of big lots Splitting of big lots
(big lot, small capacity) (big lot, small capacity) (big lot, small capacity) (big lot, small capacity) (big lot, small capacity) (big lot, small capacity) (big lot, small capacity) (big lot, small capacity) (big lot, small capacity)
Lot size with splitting Lot size with splitting Lot size with splitting Lot size with splitting Lot size with splitting Lot size with splitting Lot size with splitting Lot size with splitting Lot size with splitting
and overlapping and overlapping and overlapping and overlapping and overlapping and overlapping and overlapping and overlapping and overlapping
TB: Daily lot size WB: Weekly lot size W2: 2-weekly lot size MB: Monthly lot size PK: Period according PK: Period according# SP: Part period GR: Groff reorder DY: Dynamic lot WI: Least unit cost Exact final lot-size
to planning calender to planning calender balancing procedure size creation procedure
Additional long-term lot size planning
• When production planning or supplier need long-term estimates
YES NO
LL periodic No long-term
planning
Choice of period length for which the requirements are combined to one lot size | E.g. specification by supplier,
production planning, controlling/budget planning for advanced planning and reservation
Weekly lot size 2-weekly lot size Monthly lot size Period analog to Period according to
accounting period planning calender
Taken from 'Automatic Parameter Configuration for Inventory Management in SAP ERP/APO' by David Bucher and Joern Meissner, available at: http://www.meiss.com